Insurance Brokerage Break-Even: About $54K Monthly Revenue

Fixed costs $20.0K/mo Overhead + owner

Contribution margin 54% After variable costs

Break-even revenue $37.0K/mo Cover the base

Break-even timing Month 31 Model crosses there

Break-even calculator

If your brokerage is still ramping, the key test is whether monthly contribution covers payroll, software, rent, and compliance. This calculator checks monthly revenue, variable expenses, and fixed monthly costs against break-even.

Lean Base Full

Monthly revenue Revenue is the top line that creates room to cover costs below it. $ Low sales High sales Variable expenses Use direct costs that rise as sales rise, like agent payouts and lead spend. $ Low direct High direct

Money available to cover fixed costs $61,700 $78,000 revenue - $16,300 variable expenses

Margin ratio

79%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base that contribution margin has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in an insurance brokerage?

Cost classification

Break-even is Month 31, so clean cost tagging matters. Treat rent and base payroll as overhead, commissions as revenue-linked, and hiring as capacity steps so the model doesn’t overstate margin too early.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $4,500 per month as fixed overhead from Month 1 through Month 60.	Tying rent to revenue instead of capacity.
Utilities and Internet	Fixed	Use $650 per month as baseline operating overhead.	Scaling it with policy volume without support.
Professional Insurance E&O	Fixed	Use $1,200 per month as required recurring overhead.	Leaving it out because it isn’t tied to sales.
Owner/Principal Broker payroll	Fixed	Use $10,000 per month based on the $120,000 annual salary and 1.0 FTE.	Treating owner payroll as optional after launch.
Licensed Insurance Agent payroll	Semi-fixed	Add capacity in steps as staffing rises from 1.0 FTE in the first year to 5.0 FTE in Year 5.	Modeling agent salaries as a percent of revenue.
Annual Marketing Budget	Semi-variable	Plan the spend envelope from $48,000 in Year 1 to $144,000 in Year 5, then test CAC separately.	Mixing budgeted spend with per-sale commissions.
Insurance Carrier Commission Splits	Variable	Apply as a revenue-linked charge, falling from 12% in Year 1 to 8% in Year 5.	Putting it in fixed overhead and overstating contribution margin.
Agent Commission and Bonuses	Variable	Apply as a sales-linked expense, falling from 18% in Year 1 to 12% in Year 5.	Double-counting it inside salaried agent payroll.

How does break-even change as this insurance brokerage moves from a lean launch to a full team?

Scenario table

Lean setup breaks even at about $536k a month. By Year 3 and Year 5, higher staffing and overhead push the break-even load to about $959k and $1.34M, even as margins improve; the model reaches break-even in Month 31.

Planning assumptions only; actual results will move with mix, pricing, and hiring pace.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1	$536,000	$246,560	$289,440	54%	$0	Lowest overhead, but the buffer is still thin.
Base Year 3	$959,000	$354,830	$604,170	63%	$0	Model break-even lands here in Month 31.
Full Year 5	$1,337,000	$374,360	$962,640	72%	$0	Higher staff cost lifts the hurdle, even with a better margin.

What breaks the break-even plan for this brokerage?

Stress test

This brokerage clears break-even only if the 54% contribution margin, meaning the share left after variable costs, holds and revenue keeps pace. Slow closes, weak renewals, higher CAC, and hiring before booked revenue can push the plan past Month 31.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change from the Year 1 base case.	$536K	$0 gap	There is no cushion if revenue slips.
Revenue shortfall	Revenue lands 10% below break-even at about $482K.	$536K	$54K gap	Slow closes or weak renewals push the plan under water.
Fixed-cost pressure	Fixed costs rise 10% to about $318K.	$589K	$107K gap	Hiring ahead of booked revenue widens the monthly hole.
Margin pressure	Contribution margin slips 5 points to 49%.	$590K	$108K gap	Higher CAC or richer carrier splits eat the margin.
Combined pressure	Fixed costs rise 10% and margin falls to 49%.	$649K	$167K gap	Cost creep plus slower revenue pushes break-even well past Month 31.

What should an insurance brokerage verify before signing a lease and hiring ahead of revenue?

Founder checklist

Before you lock in the office and staff, test whether the brokerage can carry its fixed load through Month 31. The model only works if lead flow, systems, and hiring stay aligned with break-even, not with wishful growth.

1Lead flow$48K

Verify carrier appointments, quote volume, close rate, and renewal activity can support the Year 1 marketing budget and the $240 CAC assumption before you scale spend.

2Fixed load$28.9K/mo

Check that office rent, overhead, and Year 1 salaries fit inside a $28.9K monthly fixed load before you sign, because break-even does not arrive until Month 31.

3CM floor54% CM

Verify the blended book can hold about a 54% contribution margin after 12% carrier splits, 8% tech fees, 18% agent pay, and 8% marketing, or break-even slips.

4Hire timingMonth 13

Hold the second-year roles until Month 13, when the model adds service and marketing staff, so payroll does not rise before the book can support it.

5Cash runway$312K

Keep enough cash for the $312K low point in Month 31, because break-even happens there but payback still takes 54 months.

6Launch stack$2.6K/mo

Bind licensing, continuing education, E&O coverage, CRM, and rating tools before the first sale, since those fixed items start at about $2.6K a month and have to work on day one.